Bird, Marella, Boxer v. Superior Court

• Decision Date: 19 February 2003
• Docket Number: No. B162059.,B162059.
• Citation: 130 Cal.Rptr.2d 782,106 Cal.App.4th 419
• Court: California Court of Appeals Court of Appeals
• Parties: BIRD, MARELLA, BOXER & WOLPERT et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent, John J. Reiner et al., Real Parties in Interest.

130 Cal.Rptr.2d 782

106 Cal.App.4th 419

BIRD, MARELLA, BOXER & WOLPERT et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent, John J. Reiner et al., Real Parties in Interest.

No. B162059.

Court of Appeal, Second District, Division 7.

February 19, 2003.

As Modified on Denial of Rehearing March 17, 2003.

Musick, Peeler & Garrett, Mary Catherine M. Bohen and Cheryl A. Orr, Los Angeles, for Petitioner.

No appearance for Respondent.

Lange & Koncius, Joseph J. M. Lange, Los Angeles, and Jeffrey A. Koncius for Real Parties in Interest.

JOHNSON, J.

Under our Supreme Court's holding in Wiley v. County of San Diego,¹ a convicted criminal defendant must allege actual innocence in order to state a cause of action for legal malpractice against former defense counsel. The issue before us is whether a convicted criminal defendant must allege actual innocence in order to state a cause of action against former defense counsel for breach of contract and related torts arising from a fee dispute between the parties.

When the primary rights asserted in the complaint are the rights to be billed in accordance with specific contractual provisions and to be free from unethical or fraudulent billing practices on the part of defense counsel, we hold a criminal defendant client need not allege actual innocence in order to state a cause of action for breach of contract, breach of fiduciary duty, fraud and money had and received.

FACTS AND PROCEEDINGS BELOW

Plaintiff John Reiner brought this action against his former attorneys Bird, Marella, Boxer & Wolpert and individuals at that firm alleging breach of written contract, breach of fiduciary duty, fraud, and money had and received.² For purposes of reviewing a demurrer we accept as true the well pleaded facts in the complaint. The first amended complaint alleges in pertinent part:

Reiner retained defendants by written contract to represent him in a criminal matter. Defendants represented Reiner from April 2000 to December 2000, after which Reiner discharged them and retained a different firm. In April 2001, Reiner was convicted of various criminal offenses. Reiner does not allege in this action he was innocent of the charges for which he was convicted and he specifically renounces any claim defendants were negligent in their representation.

The written retainer agreement provides defendants will charge Reiner only for "services reasonably required." Reiner alleges in breach of this provision defendants charged him "an unconscionable fee" by, among other things:

•"charging plaintiff for work defendants did not perform;

•"grossly overcharging plaintiff for work they did perform;

•"inflating/padding the time charged to plaintiff;

•"manufacturing work not to advance plaintiffs cause but instead solely to increase their fees;

•"over-charging and double charging for costs; and

•"charging for costs not incurred on behalf of plaintiff."

Defendants also breached other specific provisions of the contract including:

"the agreement to bill Reiner "in `minimal units of a tenth (0.1) of an hour';"

"the agreement to "use paralegals for tasks which did not require attorneys;"

"the agreement to bill Reiner only for costs incurred "`in performing legal services under this agreement;'" and

"the agreement to bill travel costs only for "`out of town travel.'"

Reiner further alleges defendants breached their contract by "billing for costs not provided for in the contract; charging for meals that were not related to any work performed for plaintiff; and double-billing and inflating the cost of meals."

In his claim for breach of fiduciary duty Reiner alleges defendants breached their duties "to exercise the utmost care, integrity, honesty, loyalty, good faith and candor with respect to their dealings and communications with plaintiff, to refrain from deception of any form, and to place plaintiffs interests before their own interests" by:

• charging and collecting an "unconscionable fee" in violation of rule 4-200 of the Rules of Professional Conduct;

•"providing false and fraudulent responses to plaintiffs inquiries regarding defendants' billing and other practices and by concealing the true facts that would have alerted plaintiff to defendants' misfeasance;"

•"using `block billing'" rather than "separately list the time expended to perform each task;"

•"not performing] the work for which they charged plaintiff;"

•"bill[ing] for costs not incurred on behalf of plaintiff;" and

•"grossly inflat[ing] the time entries for work they did perform."

The fraud claim alleges on at least four separate occasions Reiner wrote and spoke to defendants expressing his "concerns regarding defendant firms' use of block billing; its vague descriptions of the work allegedly performed; its apparently excessive fees and inflated billings for performing simple tasks; its charging for unusual costs; and its charging for costs that were not reimbursable under the contract." In response, Reiner alleges "[defendants falsely represented to plaintiff [the] use of block billing was the standard method of conveying invoice information; that the time entries were honest and accurate and reflected work actually performed and the time actually spent to perform the tasks listed; and that the designated costs set forth in the invoices were actually incurred on behalf of plaintiff and accurately charged to plaintiff." Reiner alleges he "justifiably relied on defendants' representations" and in reliance thereon "paid each and every invoice, promptly and in full." According to Reiner, if he "had known the true facts [he] would have immediately terminated defendants' representation and would not have continued to pay defendants' invoices."

Incorporating the breach of contract allegations by reference, the count for money had and received alleges "defendants ... became indebted to plaintiff ... for money paid and expended to defendants at defendants' insistence and request in excess of $360,000, plus prejudgment interest as of the date of each of plaintiffs payments to defendants."

Defendants demurred to each cause of action on the ground Reiner did not and admittedly could not allege he was actually innocent of the crimes for which he was convicted and that he had obtained postconviction exoneration. Defendants also demurred to the fraud cause of action on the ground the facts allegedly constituting fraud were not pled with sufficient specificity.

The trial court overruled the demurrers on the ground "[this] is not a malpractice action" and therefore Wiley v. County of San Diego³ and its progeny "are inapposite."⁴

Defendants brought this petition for a writ of mandate ordering the trial court to vacate its ruling and issue a new ruling sustaining defendants' demurrers without leave to amend. We issued an order to show cause and stayed further proceedings in the trial court.

DISCUSSION

Defendants contend a convicted client cannot sue his defense attorneys over a fee dispute unless he alleges in the complaint he was actually innocent of the crime for which he was convicted and has obtained postconviction exoneration. Reiner has not made either allegation with respect to this action.

In support of their demurrer, defendants relied on a trio of cases in which convicted criminal defendants sued their attorneys for legal malpractice: Wiley v. County of San Diego,⁵ Coscia v. McKenna & Cuneo,⁶ and Lynch v. Warwick.⁷

Under our Supreme Court's opinions in Wiley and Coscia "[t]he failure to provide competent representation in a ... criminal case may be the basis for civil liability under a theory of professional negligence" only if the convicted client can establish "actual innocence" and "exoneration by postconviction relief."⁸ In Lynch, the Court of Appeal held the Wiley-Coscia rule applies to any claim for legal malpractice even if the convicted client seeks only contract damages.⁹

The court's holdings in Wiley and Coscia were based principally on public policy considerations. A requirement of actual innocence prevents those convicted of crime from taking advantage of their own wrongdoing and "shifting] much, if not all, of the punishment ... for their criminal acts to their former attorneys."¹⁰ Requiring actual innocence and postconviction exoneration also recognizes the fact that "[i]n the criminal malpractice context ... a defendant's own criminal act remains the ultimate source of his predicament irrespective of counsel's subsequent negligence." ¹¹ In sum, the court concluded "`the notion of paying damages to a plaintiff who actually committed the criminal offense solely because a lawyer negligently failed to secure an acquittal is of questionable public policy and is contrary to the intuitive response that damages should only be awarded to a person who is truly free from any criminal involvement.'"¹²

The court also identified practical considerations and "pragmatic difficulties" which support a requirement of actual innocence and exoneration. "[A] civil matter lost through an attorney's negligence is lost forever," the court observed. In contrast, a criminal defense lost through an attorney's negligence can be corrected by postconviction relief in the form of an appeal or writ relief.¹³ "Pragmatic difficulties" include the difficulty in quantifying damages as, for example, in the case of a defendant whose counsel's incompetence results in a longer sentence¹⁴ and the confusion which would arise when a jury has to decide by a preponderance of the evidence whether, but for the negligence of his attorney, another jury could not have found the client guilty beyond a reasonable doubt.¹⁵ Finally, the requirement for postconviction exoneration protects against inconsistent verdicts and promotes judicial economy by collaterally estopping frivolous malpractice claims in cases where the defendant has already been denied postconviction relief on the basis of ineffective assistance of counsel.¹⁶

In...